ACCOUNTING TERMS - ACCOUNTING DICTIONARY - ACCOUNTING GLOSSARY
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FIXED OVERHEAD Definition
FIXED OVERHEAD is those costs like rent, utilities, basic telephone, loan payments, etc., that stay the same whether sales go up or down. Variable overhead, on the other hand, are those costs which vary directly with production.
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ZERO COUPON BONDS are bonds priced at a large discount from face value. The bonds mature at full face value so the difference between the original issue price and the face value represents interest income. The issuer of the zero coupon bond saves on cash flow since the interest isnt paid out until the end of the bond holding period.
SUSTAINING CAPITAL REINVESTMENT is the periodic capital outlay required to maintain operations at existing levels, net of the tax shield available from such outlays.
